Finding a physical location for your business can be a daunting task. Many business owners’ metaphorical plates are already overflowing, then you add relocating or finding space for an additional location and it can be a full time job. In fact, it is my full job. Throughout the years, I’ve worked with many tenants to help them find and lease space. And, over the years, I’ve witnessed tenants make a handful of mistakes that make the leasing process harder than it needs to be.

Not Preparing Early Enough

Many tenants underestimate the time it takes to find a location, go through the entire leasing process and become operational within that space. In a retail market, where vacancy is at an all-time low, just identifying spaces can be difficult. Be prepared to spend a good amount of time in the identifying stage, especially if you are looking for a very specific product or are severely limited by certain criteria.

Once a location has been identified, you still need to negotiate a letter of intent, provide the necessary qualification information and documents, and then move to the lease negotiations. All of which takes time. While most leasing professionals and Landlords do their best to move you through these stages of the leasing process as quickly as possible – there are many pieces to the puzzle that must come together. Once you have a signed Lease, then the construction begins.

While finding a space that fits your exact needs is ideal, it is very rare. In fact, many of my clients need to make some sort of adjustments. In some cases, they are minimal like painting for example. In other cases, walls may need to be moved, potentially causing electrical, plumbing, or HVAC to be modified in the process.

One of the more time intensive scenarios is when the space is in shell condition and the Tenant has to complete a full interior buildout. So, as you might imagine, it can be difficult to answer when a client asks: how long it will take to find a new location? Generally, I recommend reaching out to your real estate professional anywhere between 6-12 months in advance.

Not Hiring the Right Team of Professionals

Whether it is every three years, or every ten years, most tenants don’t go through the leasing process on a regular or frequent basis. And those that do – those that have 10+ locations, have a support team helping them through the process. Establish your team and rely on their expertise.

For example, find a tenant representative to help guide you through the leasing process, do all the research for you, negotiate on your behalf, and represent your best interest. Hire an attorney representative to help you review the Lease documents and provide legal advice. And, if your new location requires finish out, make sure to hire an experienced contractor.

While you may not go through the leasing process every day, these professionals do and having them on your team will be well worth it.

Not Having Enough Initial Capital

Too commonly, leasing agents like myself run into tenants who underestimate the upfront costs that come with a new location. From the security deposit to signage costs, the initial startup costs can be significant.

Make sure to consider all initial startup costs such security deposits and prepaid rent (both are typically due at signing), finish out costs, moving expenses, new equipment/furniture, building and monument signage, professional fees, etc.

Generally, building and monument signage costs are one of the expenses that tend to surprise tenants the most. Some forget to include it entirely, while others grossly underestimate it. Lastly, be sure to have a couple of months of rent and operating expenses saved up. While the goal of every business is to be profitable right away, that is not usually the case. Be prepared for the scenario that it takes some time to get your new location to its maximum operational efficiency and profit potential.

Making Compromises Based on Rent

Being in the right location is key to a successful retail business. Businesses invest a lot into the research of identifying and understanding their customer’s habits and tendencies. Being in the best possible location to service those customers and their needs is critical. Sacrificing on location due to rental rates is a common mistake all real estate professionals see businesses make. Going to an inferior location may save on monthly expenses, but it may also cause a more significant reduction in potential profit. Don’t allow saving a buck on rent steer you into an inferior location.